PALOK BASU, J. - (1.) THIS writ petition has been filed by M/s R.R. Toshniwal Co. Pvt. Ltd., Ghaziabad seeking the reliefs that : "(1) quashing the notice dated 2nd March, 1994 under Section 29 of State Financial Corporation Act (The Act); (2) direct the respondents to make the re -schedulement of the payment in instalments because of the loan amount having been reduced from Rs. 46.50 lacs to Rs. 36.90 lacs. It may be mentioned that there was an additional prayer of reducing the rate of interest, which is being charged by the U.P. Financial Corporation (U.P.F.C.)." The writ petition was filed on 18th October, 1995. An interim order was granted subject to the payment of Rs. 1 lac being deposited. The petitioner 'scase is that the said amount of Rs. 1 lac was deposited in time, which has not been disputed.
(2.) COUNTER -affidavit has been filed by U.P.F.C. to which the rejoinder -affidavit has been filed. The petitioner has also filed a supplementary affidavit, Annexure 7 with a copy of the agreement. Mr. A.B. Saran assisted by Mr. Vineet Saran, has been heard on behalf of the petitioner while U.P.F.C. is represented by Mr. V.M. Sahai, its Standing Counsel. As jointly requested, the writ petition is being finally disposed of at the admission stage. The main grievance of the petitioner has noted above depends upon two reliefs claimed in this petition. Before the argument advanced towards the aforesaid reliefs, another point was vehemently argued and it was contended that since U.P.F.C. had written a letter to the petitioner, a copy of which has been filed as Annexure 2 in which, it has been mentioned that : "Rate of interest on loan - 19% Rate of interest on refinance - 16%" it was not open to the U.P.F.C. to charge any amount more than 16% as interest on the refinance. The argument proceeds that since the refinance was done by the I.D.B.I. on the aforesaid rates of interest concerning the loan to the petitioner 'scompany, there is no right or authority with the U.P.F.C. to charge more than the aforesaid rate. It was further contended by Mr. Saran that reference in this regard to the sanction letter, a copy of which has been filed as Annexure 1, is not permissible which does mention a higher rate of interest, because according to him the sanction letter is unilateral document and it was not permissible for U.P.F.C. to place its claim on the basis of the terms of sanction.
(3.) MR . V.M. Sahai, on the other hand, has strongly contended that there is no force in the aforesaid argument because the letter, Annexure 2 referred to above, indicates the term on which the U.P.F.C. has been permitted the refinance by IDBI. That letter denotes the rate on which the U.P.F.C. has been advanced the said loan. Consequently, when the amount obtained by U.P.F.C. will be passed on to the petitioner, the U.P.F.C. will be entitled to charge over and above 3% interest on both the items of loan as is provided in the agreement between the parties. It was, therefore, contended that the rate of interest applied by the U.P.F.C. i.e. 19% on refinance and 22% on direct finance is legitimate and has the sanction of law.;